Good data deluge morning to everyone.
The July Personal Income, Spending and Inflation Report implied that the Fed is well positioned to remain on hold ahead of its September policy decision.
Inflation in July advanced 0.2% in both the topline and the core. On a year-ago basis, inflation advanced 3.3% & 3.7%, respectively.
In other data, durable goods orders increased 1.1% while the forward-looking metric advanced 0.2%.
The revised GDP data remain unchanged at 1.5% while consumption was revised up to 3.4%, which implies a bit of a stronger household pace of spending through midyear.
🚨 July 2026 PCE: Inflation Stubborn, Incomes Rose But Spending Stalled
Income outran spending for the first time in a while. Disposable income rose 0.5% in July while spending was essentially flat, so the saving rate ticked up to 3.0%. Adjusted for inflation, consumer spending was unchanged on the month — a pause after a strong spring, concentrated in a pullback on goods.
Households kept paying up for services — especially health care — while cutting back on the big-ticket household goods they'd splurged on a month earlier.
🧨 Over the past year, consumers kept spending faster than their incomes grew, drawing down savings as inflation-adjusted income barely moved.
Inflation is still stuck. PCE prices rose 3.7% over the year and core 3.3% — both roughly unchanged from June. The stickiness is in services.
